How declining sales helped Honda find its ‘sweet spot’

Honda UK has acknowledged that its sales decline might look ‘crazy’ from the outside, but insists this has been positive for the brand.

With the new hybrid Civic going on sale, the Japanese firm has stuck to its target of electrifying all of its mainstream models by the end of 2022, and this week confirmed a trio of new electrified models in 2023.

A strong line-up of cars and an assured strategy for the future are perhaps at odds with the firm’s performance in recent years, with the overall trend in the UK being declining sales for the past decade or so.

However, Jean-Marc Streng, managing director of Honda UK, insists this is all part of a master plan.

Speaking to the PA news agency, Streng said: “From the outside our volume drop looks a bit crazy, but actually we are fine with that. Yes, if we would sell 10,000 more cars it would be better, but we believe that around 30,000 sales we’ve found our sweet spot in terms of profitability, customer base, and sustainability for the future.”

He added that it allowed the firm to be more agile in its responses, adapting to changes in the industry more quickly than some larger firms.

On the subject of declining sales, Rebecca Adamson, head of automobiles at Honda UK, noted that declining sales were “a function of our decisions we’ve made in the market – we want to optimise each car in its sector and not chase market share.

“In terms of our profitability we’ve shifted from a consistent loss to finally achieving profitability in 2021 and moving forward.”

Honda has this week revealed its plans for switching to electric vehicles, which includes the launch of 30 new EVs globally by 2030. It wants to produce two million vehicles globally, with a line-up ranging from ‘commercial-use mini-EVs to flagship-class models’.